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A Representation Of What’s Possible, Not What’s Practical, Responsible Or Achievable

A topic starting with part of an email I received this morning. “Ben, I’m just another good hard working young man in the oilfield and I’m desperate to escape worthless crooked landlords. I NEED a home for me and my wife and the kids I’d like to have. I leave houses cleaner than when I move in, pay rent early like clockwork, with no damage etc and I now understand why people trash rent houses. All my dignity has been repeatedly spit on.”

“I moved to the South Dakota…and housing is nuts here too. All a realtor is useful for is asking if you’re pre-approved for your ‘death pledge’ mortgage. Mention price and all communication ceases if the conversation made it that far. Old homes are sitting on the market for up to a year way over loan value even after ‘reductions’ in SD and back in Oklahoma. I’m at my wits end. I went to private school and have 750 FICO and some minor savings, gold/silver, but I’m not stupid. When does this SHIT END?”

“I’m applying for overseas jobs and maybe I can move to a tax haven. I’m done. I guess my point is I need some hope or advice or maybe just wanted to inform a good blogger just how the few good remaining people feel about American’s ‘future’. I wrote this after seeing an old house advertised for $100k that rents for $600 month to month in a remote town. I blew a fuse.”

The Palo Alto Daily Post in California. “Of the seven members of Palo Alto City Council, no one seems to attract quite as much Twitter backlash as the slow-growth Councilwoman Lydia Kou. Kou, a Residentialist and real estate agent, is frequently criticized by Yes In My Backyard (YIMBY) pro-housing advocates online for opposing the development of dense housing in town.”

“Some have taken to tweets to accuse her of profiting off of Palo Alto’s housing crisis by blocking the approval of new apartments, condominiums and townhouses in order to maintain multimillion-dollar property values, the reasoning goes.”

“On Thursday night, Kou inflamed housing advocates when she posted a quote calling the YIMBY movement a ‘pro-density lobby in California (that) favors density in part because it promotes ‘collectivism’ — reminiscent of the urban planning orthodoxy in the late, great Soviet Union.’ The quote is from the article ‘Restoring the California Dream, Not Nailing Its Coffin’ by urban studies scholars Joel Kotkin and Wendell Cox on. They say the housing shortage is caused by state regulations restricting urban sprawl, not local resistance to apartment buildings.”

“Vice Mayor Adrian Fine, council’s staunchest development advocate, said Kou’s tweets were ‘out there.’ Fine said that one of Kou’s most telling tweets appeared in April 2017, when she posted a San Francisco Business Journal article stating that San Francisco had doubled its supply of new condominiums.”

“‘There’s plenty of housing, you just need a superb Realtor, like me,’ Kou wrote.”

From Green Builder Media. “On the eve of Design & Construction Week, Green Builder Media Founder Ron Jones says: If NAHB wants to claim the noble title of champion of the home building industry and protector of the American dream, it needs to showcase homes people can actually afford.”

“Hardly a week goes by when I don’t receive multiple communications from the National Association of Home Builders (NAHB) beating the drum for housing affordability and blaming any lack of same on a revolving list of outside forces, namely; regulations, safety and performance requirements, the scarcity of buildable lots, escalating costs of materials and labor, tightened lending rules, unfavorable interest rates, and housing policy in general.”

“NAHB does a masterful job of manipulating its messaging to simultaneously position itself as the leading advocate for the homebuying public and as an indispensable ally protecting its industry members. In doing so, the organization seeks not only to claim the loftiest pinnacles of industry knowledge, but also the moral high ground associated with home ownership.”

“So, this brings me to the glaring contradiction that NAHB rolls out at the beginning of each new year through their official demonstration house, proudly called The New American Home (TNAH). In this cycle it takes the form of a spectacular show home in the foothills outside Las Vegas that embodies brilliant design, cutting edge technologies, all the imaginable bells and whistles, premium products and systems, impeccable workmanship, and, oh by the way, something a little north of 9,000 square feet worth of the American dream.”

“We are not talking about an exception here, NAHB’s poster child for the epitome of American residential aspiration is almost always enormous in its proportions, bearing little resemblance to a dwelling that any regular working family could harbor hopes of owning. In this case, we could fit almost four of those typical new homes into TNAH 2019.”

“I have called out NAHB on multiple past occasions regarding the scale of these projects and the message being conveyed, but their justification is that TNAH is a representation of what’s possible, not what’s practical, responsible or achievable.”

The Idaho Statesman. “Not long ago, a million-dollar home sale was a big deal in Boise. Not anymore. Last year, 95 homes priced at more than $1 million sold in Ada County, said Troy Owens, an agent with Group One Sotheby’s International Realty.

“Back in 2010, only one Ada County home sold for more than $1 million. There were 17 in 2014, 25 in 2015, 38 in 2016 and 53 in 2017. Sixty-eight homes were on the market one February day in Ada County with asking prices of $1 million or more, including 15 for more than $2 million. Forty-five of them were built since 2000.”

“‘With our airport, you can have a home here and raise your kids here and work in the Bay Area of California for four or five days and fly back here pretty easily,’ Owens said.”

“One of agent Ron McDonough’s listings, a $2.3 million home with 7,503 square feet, six bedrooms and eight bathrooms at 2200 N. Ballantyne Lane in Eagle, has been on the market since July. ‘You don’t sell these homes in a day,’ McDonough said. ‘You sell them within three to nine months.'”

“Sometimes even that’s not enough time. A medieval-style castle on Warm Springs Avenue has been on the market since July 2016. With five bedrooms, an elevator, a hot tub and a suit of armor, the house was originally listed for $3.4 million. The price was knocked down several times and is now $2.5 million.”

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This Post Has 27 Comments

  2. 1974 12.3% inflation
    gdp Contraction (-0.5%)

    imagine that

    so when do we experience inflation again?

    what century

  3. A interesting read …

    Director Lauren Greenfield Discovered What Hedge Funders, Porn Stars and Rappers All Have in Common | Wealthsimple
    https://www.wealthsimple.com/en-us/magazine/money-diary-lauren-greenfield-us

    (snip)

    “These days, it’s not about being rich — going rags-to-riches is an impossible dream for most. Now, it’s more about looking rich. Chris Hedges calls this ‘fictitious social mobility’ — it’s the only social mobility a lot of people feel is within reach. In making my film, I interviewed dozens of people about their relationship with money, and the extreme lengths people have gone to in the pursuit of wealth — or in the pursuit of appearing wealthy.”

    (snip)

    “People will go to extreme lengths to create an illusion that they’re something other than who they are. And when you’re trying to be something other than who you are, there’s no endgame. You never get there. So, in a way, this feverish consumerism and chronic aspiration to wealth is like an addiction, similar to eating disorders and drug and alcohol addiction. These addictions can take over your life.”

    1. “These addiction$ can take over your life.”

      Cell PHONE$ + internet “entertainment$” + digital camera + email access = ?

  4. That email from the oil field worker should make Alan/Ben/Janet hang their heads in shame. Unfortunately, they are too busy collecting $100K speaking fees from the Wall Street firms that they enriched…

    1. I wish I could give that guy a hug 🙁 It is so sad, I agree. But I hope he can know there are others out there that agree wholeheartedly. But I too feel hopeless a lot of the time given then endless manipulation that continues this ridiculousness.

      1. That fellow is merely inconvenienced. He’ll be fine as long as he keeps his wits. People who paid bubble prices for a house, with money they couldn’t even hope to earn in the next couple of decades are doomed.

    3. I would tell him to read (or re-read) The Grapes of Wrath because that is the future for many of the highly-leveraged current shack owners.

  5. I feel bad for that guy, and he’s not alone. For what it’s worth: Keep your chin up and focus on you and your families well being. Don’t let outside factors like parents or in-laws or HGTV or UHS passively shame you into getting buried into debt. “Oh, you’re STILL renting”? (Yeah, I’ve heard it too). But when this economy hits the skids (and it will) there will be millions of people who would love to trade places with you.

    Work, save, be happy.

  6. ” I wrote this after seeing an old house advertised for $100k that rents for $600 month to month in a remote town. ”

    Tran$lation needed …

    2. A house that is for sale for $100,000 rents for $600 a month. This means the gross rent per year is $7,200, which is a gross return on the asking price of 7.2%.

      This is doable in low income areas if a person, a landlord, knows his way around; I know a guy that owns several rentals in Compton and Lynwood who does quite well. He does well because he is “plugged in” to the community and personally knows the history of all of his tenants. In no way will he collect his tenants by placing ads in the paper.

      One thing that he has working for him in his favor is the existence of public housing. Many (most?) people who are stuck in public housing are desperate – DESPERATE- to get out . Presto – he is there to rescue them IF they will “toe the line”. If they decide not to toe the line then out they will go and hence they get to go back to public housing.

      1. On the opposite end of the spectrum is the case that I personally know of of an arrogant white woman who believed she was destined to become rich as a slum lord, a slum lord in Compton.

        Well that didn’t work out all that well. Some community activists launched a rent strike and a lawsuit against her and she ended up losing her ass.

      2. Yes I agree, mortgage payment on $100k house with 20% down should be around $450 a month. So, not unreasonable that it would rent for $600…

      3. a gross return on the asking price of 7.2%.

        This is doable in low income areas

        Sure, less RE taxes, maintenance, insurance, vacancy, and so on. Not so much a good return unless the property is going up in value due to a housing bubble. The business model of the last 40 years. Jingle can explain how doing this with borrowed money will make you rich though.

  8. “Not long ago, a million-dollar home sale was a big deal in Boise. Not anymore. Last year, 95 homes priced at more than $1 million sold in Ada County, said Troy Owens, an agent with Group One Sotheby’s International Realty.”

    This does sound sane to anybody? I guess everyone is pulling $250k annually now in Boise. LOL

    “‘With our airport, you can have a home here and raise your kids here and work in the Bay Area of California for four or five days and fly back here pretty easily,’ Owens said.”

    Again, how ridiculous is this statement? Why not just fly to Mexico or some cheap third-world countries? They are cheaper right? And how do you raise the kids if you dont see them for 4 or 5 days?!?

    If this doesn’t tell you we are in a “JUGE” BUBBLE, I don’t know what!

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